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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: Petz who wrote (148708)	1/21/2005 9:32:14 PM
From: Elmer Phud	Read Replies (2) \| Respond to of 275872

Petz So it makes sense to apportion depreciation cost PER CHIP to the fraction of production capacity that is required to produce that chip. I think that's what actually happens. The depreciation is priced into the wafer cost and with the lower yield of the larger die the depreciation cost is proportionally higher. If Intel were to convert ALL their manufacturing to dual core, they would need one heck of a capital spending plan! Intel produces far more non-CPUs than it does CPUs. How could they produce anything else if they converted all their manufacturing to dual-core? 0.7$1,140M depreciation/43M CPUs comes to $19 per CPU. Assuming Prescott is an "average" CPU, the incremental depreciation cost of dual core is $33.* So you think it's fair to assign all depreciation to CPUs? Why should all the other products get a free ride?